There is currently an active discussion thread in HWZ on CPFLife, with reference to Mr 1M65's CPFLife Strategy.
As I will need to make the decision on this in the next few years, I put a little thought in it and will use this blogpost to record down my preliminary thoughts
(1) There is an opportunity cost after setting aside the FRS or ERS at age 55 as payments only start at age 65 (or later if you want to defer). The opportunity cost arises because at age 55 you should still be mentally active and still able to manage your investments. On a 10 year holding period, MSCI World should outperform CPF Life interest.
(2) On the other hand, setting aside FRS of about $213k+ is not a huge amount and can represent the 'ultra-safe' fixed income portion of your portfolio yielding a decent risk-free interest. For example, after my $200k of SSB mature, I could roll this over into MSCI World instead of fresh SSB/T-bills, since I have $213k FRS sitting in CPF.
(3) Currently, I'm not inclined towards ERS. CPF gives bonus interest for the first $60k. So the ERS amount set aside, you only get 4% interest. From age 55 - 65, I believe that I will still have enough investing ability left to to beat 4%.
(4) Reading various forum posts, it appears that our views are deeply affected by the experience of our parents, grandparents, and other older relatives.
(5) My parents have hit 80 years milestone and hopefully I have inherited their longevity genes. I hope to stay healthy and fit and collect CPF Life at age 65.
All this may change as I get closer to 55 and get more information / different views. I'm just writing this down now as a reference point.